Events on the other side of the globe have had repercussions on Brazilian companies of different sectors and sizes. To contain the Covid-19 pandemic, China has implemented a series of lockdowns that have caused the economy there to hit the brakes.

In a domino effect, the slowdown makes it difficult to import products that are essential for industries in Brazil, which contributes to inflation continuing to rise.

According to the executive president of AEB (Brazilian Foreign Trade Association), José Augusto de Castro, in an interview with Estadão Conteúdo, the crisis represents an inflationary impact and is already affecting the prices of products coming from abroad. “In April, import prices, in dollars, rose 34.4%, with a 6.9% decline in quantities. In March, prices had already increased by 29.5%”, he says.

The national pharmaceutical industry - which imports 90% of its inputs, most of it from China - has faced a delay of more than two weeks in the delivery of raw materials, according to information from Alanac (Association of National Pharmaceutical Laboratories), which brings together more of 50 companies.

“In a globalized world, any situation that occurs with major world powers impacts the market, especially in countries like Brazil, an underdeveloped country and a major importer and exporter of China. With the lack of inputs, the pressure on inflation and, consequently, its increase, will be inevitable”, articulates Richard Clayton, founder of Trinta Percento, a company that works with accounting and business management.

Despite this, he adds that companies can take measures to reduce the impact of the crisis, such as turning their attention to the business, especially with regard to their costs. “In addition, it is worth identifying potential expenses that can be reduced to improve your cash flow and increase your availability of cash”, he says.

For Clayton, it is also important that companies understand how the market in which they operate can be affected by the recession. Thus, it is possible to plan the need for capital for the coming months, which will be essential to maintain the financial health of the business.

Financial management can mitigate the effects of the crisis

In Richard's analysis, having the business numbers at hand will be crucial for decision making in any company. “In conflicting and challenging times, making assertive decisions in the shortest possible time will be crucial for the maintenance of the business. In addition, it will facilitate the analysis of which expenses can be reduced in the short term”.

According to the entrepreneur, another important point is to count on management companies as partners, which can bring visions of markets that are complementary or different from the company, as well as an “outside view” of the business, which can elucidate solutions not thought of by those who run the company. .

“Even in a challenging time, when we are still going through a pandemic, war and lack of inputs that impact the market globally, there is a great opportunity for companies. Those who have relevant information about their business will be able to strategically position themselves when the economy picks up again”, he explains.

To conclude, the partner at Trinta Percento observes that the Brazilian market is constantly experiencing cyclical lows and highs. "Usually, the companies that grow the most in the so-called 'post-low' are those that can understand the market and make the best decisions in an agile way", he concludes.

Source: www.portalvamos.com.br